Stock Chartist

Commentary and recommendations about the stock market, sectors and individual stocks from a chartists perspective. Observations are based on the belief that "at their core, fundamentals are subjective but momentum is fact."

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January 6th, 2012

A recurring theme among some reporters and bloggers is the possible breakout of the mega-caps. I believe one cause for this line of reasoning is the persistent dream of an end to what is now the 12th year of the secular bear market. A name that continues to come up as emblematic of this breakout thesis is WMT (Walmart). Any stock chart aficionado salivates over the potential of a stock like WMT. When stuck in a horizontal trading range for over 10 years there’s the potential of a huge move should a breakout above that huge wall of resistance is ever successful:

But WMT isn’t the only large-cap stuck in the secular bear market trap. As a matter of fact, half of the 30 Dow Industrial stocks are below where they were on December 30, 1999 (WMT is down 12.8%). There are a number of large-cap stocks not part of the DOW that also have charts that have attractive potential should they break above their own multi-year resistance levels:

MSFT (Microsoft)

AMGN (Amgen)

QCOM (Qualcomm)

DIS (Disney)

What we’re all waiting for are stocks to breakout like IBM because when more do, we’ll be certain that the 12-year secular bear market will have ended: